The launch of the European Digital Identity Wallet (EDIW) presents a significant opportunity for the broader adoption of embedded identity services across Europe's single market.

The EDIW provides citizens and residents across the European Union (EU) access to a secure, interoperable digital identity that can be used to access a wide range of online and offline services. EDIW users will be able to store and selectively share verified identity information (e.g. name, gender, age), attributes (e.g. addresses, contact information), entitlements (tickets) and credentials (payment accounts, driving licenses, passports) with government and private relying parties.

The availability of a standardised, interoperable, EU-wide digital identity unlocks the potential for service providers to embed identity-related services into their offerings, streamlining customer experiences and unlocking new business models.

for example:

Frictionless eCommerce Onboarding: Online retailers can seamlessly integrate EDIW verification to create new customer accounts, reducing friction and improving conversion rates during the signup process.

Secure Access to Digital Accounts: EDIW integration can enable customers to securely access their online retail accounts, allowing them to view past orders, manage their profiles, and make purchases without the need for additional authentication steps.

Simplified in-store Transactions: The EDIW can be used to streamline identity-based transactions in physical retail stores, such as age verification for the purchase of age-restricted products, or as a secure method of payment.

Shipping and delivery verification: the EDIW can be used to ensure verified shipping information is used to deliver goods and services, whilst also enabling logistics companies to proof the identity of persons to whom goods are delivered.

Loyalty and Rewards Programs: Retailers can leverage the EDIW to enable customers to easily enrol in and manage their loyalty and rewards programs, enhancing the overall shopping experience. 

Driving Adoption and Acceptance
The European Commission has set a target of having 80% of EU citizens and residents with an EDIW by 2030. To achieve this, the Commission legally requires government agencies, financial institutions, large online platforms, healthcare, education, utilities, and travel providers to accept the EDIW. This mandate will ensure widespread adoption and acceptance of the EDIW, but it is also crucial to ensure small and medium-sized enterprises (SMEs) can easily integrate the EDIW into their customer journeys. With over 25 million SMEs in Europe, accounting for 99% of all businesses, SMEs acceptance of the EDIW is essential for the wallet to become a ubiquitous part of everyday transactions and interactions. To drive SME adoption, the EDIW must offer a seamless and commercially viable integration experience, with clear value propositions for businesses. By unlocking the value of the EDIW, SMEs can better compete with larger enterprises and provide their customers with a more streamlined and secure experience.

Addressing the Challenges of Interoperability
One of the key challenges in enabling widespread embedded identity services across Europe's single market is the need for service providers to integrate with multiple digital identity wallets in each market. Even for large enterprises with the necessary resources, this can be an expensive and resource-intensive endeavour. There is a clear and obvious role for service providers to offer a single point of integration to connect relying parties with each EDIW across the single market.

Opportunities for Service Providers to embed identity services into their offerings
The emergence of the EDIW presents a significant opportunity for service providers (e.g. online shopping cart, in-store point of sale systems, payment service providers, logistics and shipping companies and more) to embed identity services into their offerings along key customer journey touch points. These providers are well-positioned to offer embedded identity services, leveraging their deep integration into customer journeys and business processes. By offering EDIW integration as part of their service offerings, these providers can unlock new revenue streams, enhance customer experiences, and gain a competitive advantage in the market.

For example, payment providers can integrate EDIW verification into their checkout flows, streamlining the payment process and reducing fraud. eCommerce platforms can embed EDIW-based account creation and management, improving user onboarding and loyalty program participation. Logistics providers can leverage the EDIW for secure identity-based deliveries, enhancing the overall shipping experience.

Commercial Opportunities for Aggregators and Distributors
The role of aggregators and distributors in the EDIW ecosystem is crucial, as they can provide a single integration point for service providers, enabling them to reach the entire EDIW network within the single market.

These intermediaries can unlock several commercial opportunities, including:

1.   Transaction fees: Aggregators and distributors can charge a fee for each EDIW-based transaction or integration, creating a sustainable revenue stream.

2.   Value-added services: By offering additional services, such as analytics, fraud detection, or customer support, aggregators and distributors can generate additional revenue and differentiate their offerings.

3.   Ecosystem enablement: Aggregators and distributors can support the broader adoption of the EDIW by providing education, onboarding assistance, and technical integration support to service providers, further cementing their role as critical infrastructure. 

For these aggregator and distributor models to be supported, it will be essential that the EDIW ecosystem provides clear technical and commercial guidelines, ensuring interoperability, fair revenue sharing, and a level playing field for all participants.

Conclusion

The European Digital Identity Wallet represents a transformative opportunity for the adoption of embedded identity services across Europe's single market. By leveraging the interoperability and widespread acceptance of the EDIW, service providers can streamline customer experiences, unlock new business models, and drive greater efficiency and security in digital interactions. To fully capitalise on this opportunity, it will be crucial for identity service providers to position themselves as distributors or aggregators, enabling seamless integration for relying parties and unlocking the network effects that have proven successful in other industries, such as payments. By doing so, these providers can play a crucial role in enabling the widespread adoption and acceptance of the EDIW, ultimately benefiting businesses and citizens across the European Union.